This invention relates generally to a process and apparatus for the determination of premium tables to produce annuity rates. In particular, this invention relates to a process and apparatus for deriving impairment based mortality tables with corresponding annuity rates used in personal pensions or life insurance contracts.
The application of premium formulae to mortality rates is normal actuarial practice. Mortality tables are generally constructed based simply on the fact that the mortality, or risk of death, of individuals, both male and female, increases with age. Mortality tables are constructed based on the available research statistics relating to the type of population under measurement. Examples include tables of life assured mortality and tables of general population mortality.
These tables do not generally take into account specific life impairments in individuals. To do so demands a unique approach, recognizing that, for certain individuals, their impairments are such that the timing of their death is much more likely to be determined by that particular impairment rather than by the normal aging process as recognized by existing mortality tables.
The present invention provides a process and apparatus for the determination of premium tables to produce annuity rates, wherein specific life impairments are an implemented factor in the determination.
It is therefore an object of the present invention to provide a novel approach for constructing mortality tables on the basis of duration; that is, the expected life span of an individual with a particular impairment or other risk.
It is a further object of the present invention to provide a process and apparatus for compiling a mortality table which sets out a number representative of the expected mortality of a person, for each of a plurality of possible ages of that person and for each of a plurality of rating categories based on possible maximum probable lifetimes of that person dependent on the sex and medical condition of that person.
It is a further object of the present invention to provide a process comprising adjusting the corresponding contents of a conventional mortality table, based on normal population life expectancy, by factors, determined from a predetermined algorithm, which are a function of the predicted life span of the person at each of a plurality of ages up to the age of death, and an apparatus comprising a computer system through which this described process can be performed.
It is a further object of the present invention to provide a process and apparatus for deriving premium tables to produce annuity rates, the process comprising addressing the appropriate mortality table, compiled in accordance with the invention, to the age and rating category of a person to determine the number representative of expected mortality, and applying the number to conventional formulae for premium calculation, thereby providing rates specifically taking into account that person""s individual life impairment, and the apparatus comprising a computer system through which the described process can be performed.
It is a further object of the present invention to provide individualized mortality tables for a variety of medical and/or high risk factor conditions.
It is a further object of the present invention to provide impairment based mortality table that have been corrected for medical and/or social advances.
It is a further object of the present invention to provide an annuity rate driven premium table.